Strategic and Financial Bidders in Takeover Auctions
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Malenko_Strategic and.pdf
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530.19 KB
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Author(s)
Gorbenko, Alexander S.
Malenko, Andrey
Date Issued
November 2014
Journal
The Journal of Finance
Publisher
American Finance Association/Wiley
Citation
Gorbenko, Alexander S., and Andrey Malenko. “Strategic and Financial Bidders in Takeover Auctions.” The Journal of Finance 69, no. 6 (November 10, 2014): 2513–2555.
Version
Author's final manuscript
Abstract
Using data on auctions of companies, we estimate valuations (maximum willingness to pay) of strategic and financial bidders from their bids. We find that a typical target is valued higher by strategic bidders. However, 22.4% of targets in our sample are valued higher by financial bidders. These are mature, poorly performing companies. We also find that (i) valuations of different strategic bidders are more dispersed and (ii) valuations of financial bidders are correlated with aggregate economic conditions. Our results suggest that different targets appeal to different types of bidders, rather than that strategic bidders always value targets more because of synergies.
MIT Department
Sloan School of Management
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Creative Commons Attribution-Noncommercial-Share Alike
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DOI of Published Version
https://doi.org/10.1111/jofi.12194
